Air India seeks Rs 400 crore from banks

New Delhi: Cash-strapped Air India-Indian Airlines combine is learnt to be seeking an urgent loan of Rs 300-400 crore from banks to meet its immediate working capital requirements like wage payments and operational expenses. AI has been facing a tough time in raising loans from banks due to a question mark on its repayment capacity.
The airline now faces the uphill task of reaching wage cut agreement with employees. AI-IA together has 32,000 employees with an annual wage bill of Rs 3,600 crore. Just 1,600 employees or 5% of workforce account for Rs 800 crore that's almost quarter of the entire wage bill.
The people in this group, mostly pilots and aircraft engineers, are paid between Rs 25 lakh to Rs 1.4 crore annually. Talks are being held with them to accept some pay cut as the wage reduction has to be proportionate to earning slab because a junior employee earning Rs 10-20,000 monthly will be unable to survive a big cut, said sources.
The AI management has to show a concrete progress on wage front to the GoM, headed by FM Pranab Mukherjee.
Apart from wages, the aviation ministry and AI management are also eyeing cuts in buying 111 new planes for Rs 50,000 crore.
27/10/09 Saurabh Sinha/Economic Times

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Categories: NACIL Oct 2009